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Posted at April 30, 2004, 1:59 pm: I've been thinking about this lately and wanted an opinion. This is more of a Zoo post, but the Zoo has been so bloody useless lately, I figure I post here first. Anyway, I think the typical part-time online player gets royally screwed by the IRS with taxes. Especially if you claim the standard deductible if your itemized deductions are small. Typically, if you do not pay interest on a mortgage, do not have educational expenses or high medical expenses you don't have much in the way of itemized deduction. However if you wish to deduct gambling losses you *have to* itemize. There are still two drawbacks to itemizing however: 1) If you are only a part time, low limit bonuswhore (like me); then your losses are probably going to be less than your standard deduction ($4,750 for single filers, $9,500 for married filing jointly for 2003). If all your itemized deduction are only gambling losses, then there is a good chance that it is going to be lower than $9,500 (if you're married). For example, say in the year you have $16,000 in winnings (have to include all bonuses, comps, rakebacks etc). And $8,000 in losses, for a total profit of $8,000. Then it wouldn't make sense for you to claim itemized deduction because the standard deduction is higher. Furthermore, if you already have a full time job, you will be taxed on $16,000 NOT $10,000, because a) you can't (won't) claim itemized deductions, and b) your standard deduction is already applied for your full-time job income. Applying a 30% tax rate, you then pay $4,800 on a $8,000 profit, which is 60% taxation. Things get even worse if you're barely break even. Say you only have $10,000 in winnings, $8,000 in losses for a $2,000 profit. Applying a 30% tax rate to the $10,000, you have to pay $3,000 taxes on $2,000 profit. Ugh. 2) The second drawback is that the IRS requires you to record each session, time spent, location, amount won/lost *and* the name and phone number of someone who was there with you. Since you're playing online, you obviously can't do this. Nevermind in states where online gambling is not kosher. They will require this information if they audit you, but I imagine that when you claim thousands of dollars in gambling losses, your chances of audit goes slightly higher than average. So I think the biggest drawback to part-time online-gambling is that at the end of the tax year, you get a far heftier rake then you would if you played B&M. Opinions, comments, corrections appreciated! Original of the message was taken from http://www.bonuswhores.com/phpBB2/ Replies:You pay taxes on your online gambling? I would have to be making 20K+ ...Well, I have no idea how much activity there needs to be for "the Man"... Billions are wagered on sports betting and casino games on the Interne... -+So basically if you withdraw $1000 from Neteller to you bank account, ... Some more info, this from http://www. If i take it out and get it in my account then I pay tax too. Just quit winning so much money and all your Tax woes will be healed. Thanks Johnny, That's pretty much a good concise explanation. I just gotta say my little piece and you guys can bash me at your disc... I'm not completely certain, but I'm fairly sure that your rambling abo... Other Topics of Bonus Whores:What other sites do you check out regularly?What is your winrate? (for those with PT) Tilt Spam The description of OT needs changing William Hill Deposit Problems INTERTOPS Garunteed Tourneys? Advice Wanted on Tournaments and Bankroll This is why I hate noobs. fastest way to clear TGC bonus 50% paradise bonus sb55 Cnn.com article re: Poker's populatiry fading! ;) Getting ready for a B2B Rundown, seeking advice! S&W .38 Texas Hold 'em Edition This isn't a bitch Balancing bonus with softness of games Party Skins or Cryptos? Empire deposit + reload Carib Sun Now Raked? Exclusive $3K Freeroll for Bonuswhore Players yet another prima $50 spinpalace My son likes the Simpsons I am the Ultimate Whore Closing party and opening party-skin for rakeback. Party rake structure - need help! UB bonus points/Bodog/Littlewoods empire lock up the bonus If you like Ultimate Bet... Thor shoes Well, I guess it's been two weeks... TGC .25/50 BRPS bonus is valid until... 180% of your buyin goes to katrina relief!!! Whoops, Reversed IGM and First Deposit at Party Clearing bonuses at SnG's $10 Free, NO Deposit at POKERound.com (SPAM) Interpoker $40 Bonus I am ready for some party skins reload re: the casino/sb forums |